Case Study: Ikea Invades America Essay Example
Case Study: IKEA Invades America
Introduction IKEA has an innovative strategy that has made IKEA Group a top furniture retailer around the globe. What distinguishes IKEA from other furniture retailers is that the stores are entirely self-service and all furniture is purchased unassembled, and furthermore, IKEA strives for a combination of quality and cost-efficiency in the production and sales of items. Additionally, there are features in every store to mitigate the furniture shopping process, including child playrooms and Swedish Cafés. IKEA was founded by 17-year-old Ingvar Kamprad in 1943, the flagship store opened in Stockholm in 1965, and today (as of 2002) there are 154 stores in 22 countries. The company’s success and customer approval rates are exceptional; though there are weaknesses and room for growth in IKEA’s strategy, particularly in the highly competitive and fragmented U.S. market.
Strategy, Strengths and Weaknesses Two aspects of IKEA identify the organizations strengths, one can be summed up in the company’s slogan, “Low price with meaning”, and the second is a superior shopping experience. Ikea’s product strategy is highly effective, and a wide range of furniture stores utilize similar methods. These include deigning products based on consumer trends. In the preparation of a new product, IKEA matches low cost with quality by prioritizing different types of materials for different functions. In the case, the example provided is that stronger and better woods are used on exposed surfaces, such as the top of a bureau, and less exposed, less vulnerable aspects such as inside draws will use lower-grade wood or particleboard. IKEA professionals search markets around the globe for competitive opportunities for materials and production processes in order to minimize costs while maximizing quality. Additionally, since all products are self-assembled by comsumers, they are shipped in flat-packaged boxes which reduced shipping costs to
Introduction IKEA has an innovative strategy that has made IKEA Group a top furniture retailer around the globe. What distinguishes IKEA from other furniture retailers is that the stores are entirely self-service and all furniture is purchased unassembled, and furthermore, IKEA strives for a combination of quality and cost-efficiency in the production and sales of items. Additionally, there are features in every store to mitigate the furniture shopping process, including child playrooms and Swedish Cafés. IKEA was founded by 17-year-old Ingvar Kamprad in 1943, the flagship store opened in Stockholm in 1965, and today (as of 2002) there are 154 stores in 22 countries. The company’s success and customer approval rates are exceptional; though there are weaknesses and room for growth in IKEA’s strategy, particularly in the highly competitive and fragmented U.S. market.
Strategy, Strengths and Weaknesses Two aspects of IKEA identify the organizations strengths, one can be summed up in the company’s slogan, “Low price with meaning”, and the second is a superior shopping experience. Ikea’s product strategy is highly effective, and a wide range of furniture stores utilize similar methods. These include deigning products based on consumer trends. In the preparation of a new product, IKEA matches low cost with quality by prioritizing different types of materials for different functions. In the case, the example provided is that stronger and better woods are used on exposed surfaces, such as the top of a bureau, and less exposed, less vulnerable aspects such as inside draws will use lower-grade wood or particleboard. IKEA professionals search markets around the globe for competitive opportunities for materials and production processes in order to minimize costs while maximizing quality. Additionally, since all products are self-assembled by comsumers, they are shipped in flat-packaged boxes which reduced shipping costs to